A Florida state appeals court upheld a previous trial court ruling April 16 defending the right to bill for the professional component of clinical pathology services. The case is one in which an insurer maintains it has no obligation to pay for the services.

In the appellant case of Health Options Inc. v. Palmetto Pathology Services, the defendant HMO maintained that despite a trial court’s rejection of its position, it had no obligation to pay for professional component services provided to its subscribers because these services are “hands-off” and not “rendered to” specific Health Options members.

The appeals court’s decision reaffirms the trial court’s ruling in support of the right of pathologists to bill for and be paid for their professional clinical pathology services.

House passes cytology act

The Cytology Proficiency Improvement Act of 2007 passed the floor of the U.S. House of Representatives April 8.

H.R. 1237—introduced by Reps. Bart Gordon (D-Tenn.), Tom Price (R-Ga.), and Nathan Deal (R-Ga.) with the support of 175 House cosponsors—would revamp and modernize the current cytology PT program by establishing a new oversight model that requires annual continuing medical education requirements to keep pace with advances in science and technology, promote best practices, and enhance locator and interpretive skills.

A direct billing law in Maryland

The Maryland House and Senate unanimously passed direct billing legislation April 7 that will protect patients by prohibiting markups on anatomic pathology services by an ordering physician who does not perform or supervise the service.

S.B. 602 and H.B.1089—legislation supported by the CAP and the Maryland Society of Pathologists—require billing to be sent directly from the laboratory or physician performing or supervising the AP service to the patient or insurer.

Maryland governor Martin O’Malley signed the legislation April 24.

Court supports HHS ­clampdown on pod labs

A U.S. district court dismissed a lawsuit May 5 challenging the Medicare anti-markup provisions in the 2008 Medicare physician fee schedule rule, a decision that dissolves a preliminary injunction barring the provisions from being implemented and makes them immediately enforceable.

The case was brought when UroPath LLC and three urology groups filed suit against the Department of Health and Human Services seeking an injunction to halt implementation of the provisions in the rule, which went into effect on Jan. 1.

Citing a recent Supreme Court decision and existing case law, judge Mary M. Collyer concluded that section 405 (h) of the Medicare Act mandates the “channeling” of virtually all legal attacks through the agency, and she dismissed the case on the grounds that the federal court does not have jurisdiction in the matter.

The three urology groups and their principals would now be required to file a claim against the rule with the secretary of HHS, and exhaust the agency's grievance process before pursuing civil action.

In addition, the judge ruled that UroPath and its medical director have no standing to challenge the anti-markup rule because they do not participate in Medicare.

The CAP provided the court with an amicus curie brief explaining why pod lab arrangements do not comply with the intent of the in-office ancillary exception to the Stark law prohibition on self-referrals.

The anti-markup rule is now effective for AP services if the physician group is billing for services performed in a “centralized building” and the location does not meet the definition of “same building,” as both are defined in the Stark regulations.